Worldwide: Offshore-i: Quarter Four 2014 Report On Offshore M&A

Last Updated: 3 March 2015
Article by Cameron Adderley

Most Read Contributor in Bermuda, September 2018

FOURTH QUARTER 2014

In this quarter we report that while M&A volumes and values may remain choppy in most regions of the globe, including the United States, the offshore market has enjoyed a bumper 2014. In fact, our analysis reveals several new peaks in the market, and highlights the sectors and jurisdictions that are proving to be the engine rooms of an increasingly bullish market.

The fourth quarter of last year saw the announcement of 628 deals, worth a cumulative USD69.2bn. Whilst activity levels were on a par with previous quarters, values were higher, with the quarter the second highest by value in what was an exceptional year. The average deal size in the quarter was USD110m, a number overshadowed in only four quarters over the past 11 years, and making the year as a whole the largest on record by that measure, at USD103m.

As always, we are ever aware of the role that a small number of mega deals can play in bumping up quarterly totals. These mega deals are, of course, to be welcomed, and there were two such transactions – worth north of USD5bn – in the fourth quarter, after three in the first half of 2014.

Really big deals are once again happening, and they often place offshore entities centre stage. When we take the temperature of offshore as  gainst other world regions, it is  heartening to see our markets ranking fourth for deal value in this quarter  behind North America, Western Europe and the Far East and Central Asia); ranking sixth for the number of deals; and enjoying third place by average deal size, behind only North America and South and Central America.

FULL YEAR 2014

The year 2014 is a standout year for offshore M&A and IPOs for many reasons. Most notably, we see aggregate deal value for the year up 63% on 2013, with USD277bn spent on offshore deals as against USD170bn in the previous 12 months. What's more, 2014 is the highest year on record for total deal value by some distance: in the past decade, only four years have seen aggregate deal value top  USD200bn, and the next highest figure was recorded in 2007, when USD239bn was spent on offshore targets. The number of deals, (2,687) is broadly consistent with an average north of 2,500 that we have seen since 2007, but still ranks third for the past 10 years, behind volumes recorded in both 2009 and 2010.

A further positive message emerges when we look at offshore acquirer deals. These are deals where the acquisitive party is based offshore, although their target might not necessarily be. In 2014 these hit record levels, with the year the busiest we have seen by some distance there.

But while we take heart from buoyant appetite for offshore M&A deals, we are always cautious that markets can just as easily turn down again as we embark on 2015. US President Barack Obama called the end of the financial crisis in his State of the Union address in January, and that is a sentiment we tend to share. But still, global financial markets are far from stable and secure with Eurozone tremors, terrorist attacks, and on-going tensions with Russia all more than capable of seriously unsettling dealmakers at short notice. Faltering growth in parts of Asia, on-going government austerity programmes, fluctuating oil prices and a pending general election in the UK, may all yet have the capacity to dampen activity during 2015.

Nevertheless, 2014 was clearly the best year for offshore M&A on record, and the general trajectory appears to be upward. We see our markets stabilising at strong levels, and we hope that 2015 sets out on a similar footing.

KEY THEMES

  • There were 628 deals in the quarter, down on the 689 recorded in the third quarter but likely to edge higher as the flurry of year-end transactions is reported. This three-month period maintains the run of 600-plus deals per quarter that started in Q2 2013 and is gaining traction.
  • The value of deals was USD69.2bn, up 38% on the previous quarter and the second highest quarter of an exceptional year. Following the three megadeals, worth in excess of USD5bn, announced in the first half of the year, two more were announced in Q4.
  • As a whole, the year 2014 was a peak year for value, with total deal value extraordinarily high at USD277bn, significantly ahead of a previous peak set in 2007.
  • This is the fourth quarter in the last five to record more than 10 deals worth more than a billion dollars each, after only four such quarters in the preceding decade. There were 12 billion-dollar deals in Q4 2014, and a mammoth 49 across the year, compared to 28 throughout 2013.
  • The financial and insurance activities sector was once again on top, thanks to two deals worth north of USD5bn each. Deal value remains widely dispersed with 17 subsectors showing cumulative deal activity worth more than USD1bn each.
  • The most popular deal type is capital increase, a new definition to represent minority stake transactions that do not involve third-party acquirers. There were 225 of these deals, 211 acquisitions, and 135 minority stake deals in the quarter.
  • As usual, the Cayman Islands dominated deal volumes as the top target, accounting for a quarter of all deals done offshore. Bermuda, the BVI and Hong Kong were largely level-pegging behind, while in value terms, both Guernsey and Cayman sit on equal terms behind Bermuda, which saw USD20bn of deals, or 29% of the offshore total.
  • Outbound deals involving offshore acquirers maintained high levels for every quarter of 2014, with 627 outbound deals worth USD55bn in Q4 2014. The year was by far the busiest on record for outbound transactions, with Hong Kong and BVI-incorporated companies the most active.
  • The offshore region remains ranked sixth in the world by deal volume for Q4 2014, but rose back up two places to fourth for value activity. Average deal size rose to third worldwide, behind only North America and Central and South America.

*Offshore-i reports mergers and acquisitions and IPO activity in offshore jurisdictions in Q4 2014 using data from the Zephyr database, published by BvD. The offshore region covers target companies in Bermuda, British Virgin Islands, Cayman Islands, Hong Kong, Guernsey, Jersey, Isle of Man, Mauritius and Seychelles.

The date range is 1 October 2014-31 December 2014 inclusive. Deal status is as announced within the time period covered. Where necessary, deal values have been converted to USD at a rate set by Zephyr. Not all deals have a publically known value. Not all deals are reported immediately, so the figures are subject to change as new information becomes available.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions